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Digital News Report – A depressed housing market can be bad news for homeowners but good news for homebuyers. In some areas housing prices have declined 50 percent or even more.
There are several ways to buy homes after they have been foreclosed on. Banks will offer Real Estate Owned (REO) homes while HUD homes are available through the US Department of Housing and Urban Development (HUD).
Some state and local agencies may also acquire homes after a default. Many of these government agencies, including HUD, will require cash or a wire transfer to complete the sale. But this means the homes will be sold at deep discounts and well below market value.
The Federal Housing Authority (FHA), a division of HUD, will guarantee loans if the property qualifies. Banks love to make FHA loans because they are guaranteed to be paid. If the homeowner defaults HUD pays the bank (or lien holder) and the home is taken back and sold through HUD.
If the home is in good shape it can be sold through HUD with FHA financing. In some cases the homes are vandalized and HUD must sell at a deep discount. Neighboring homeowners love to see these houses sold and fixed up.
HUD contracts with various real estate companies to unload their inventory. These companies have a virtual monopoly on HUD homes for sale in their area. For instance, if you want to buy a HUD home in northern California, you will need to see PEMCO Limited. Their website is easy to use and customers can search according to zip code and sort according to other criteria.
By: Tina Brown
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HUD’s FHA financing is actually a pretty good deal in a lot of situations. I’m hoping to buy a HUD or FannieMae property soon, and have seen quite a few decent homes here in Denver.
I’ve quoted you on an article discerning foreclosures. It’s at http://blog.home-fish.com .